It may seem odd to begin a digital transformation with a legacy physical asset like a bank branch, but the reality is that the branch can be the face of any digital transformation project.
Many believe that the bank branch is on borrowed time. There is no doubt that the branch has indeed suffered when it comes to handling some routine transactions, particularly around basic deposits and withdrawals, yet the branch simply needs to transform to meet the new customer needs and expectations.
Our research supports the fact that the branch indeed continues to be part of the omni-experience, particularly when it comes to complex transactions—including account opening, financial advice, and closing on most credit products.
The challenge being faced by heads of retail banking is where to begin the process of transforming their branches. In this blog, we will focus on just the first step, but it really is a five step process. Those steps are as follows:
- Audit the existing branch network
- Develop and measure the necessary Key Performance Indicators (KPIs)
- Assess technology solutions
The first step of any transformation project is to better understand the assets already in place, and this begins with a thorough audit and analysis of the existing branch network. This analysis often lacks any suggested improvements or implementation of new technology.
There are three basic steps required for this audit:
- Assign customers to a branch
- Develop some level of categorization of types of branches
- Create a branch blueprint
First, develop a method to properly assign customers to a branch, or if they are purely digital, then create a digital branch and assign them accordingly. The definition of branch assignment can vary but should be consistent such as place of last three deposits or home address within a certain distance from the branch location.
Next, develop a categorization for branch types—perhaps just a few types are necessary—and align each branch into this categorization. Some suggestions for branch types are full-service branches, assisted self-service branches, in-store and on-campus branches, and finally showcase centers. Specific KPIs are identified for each branch type to assess their performance.
The final step of the audit is to develop an initial blueprint for the existing branch network that provides analysis on what the impact will be when developing a branch transformation solution, which will likely shrink branches, modify services offered and, in some cases, physically close locations.
Once the KPIs have been tracked and measured over time to provide actionable insights for improving branch operations, a more finalized blueprint will be developed. An analysis of the current state of each branch, in addition to finding a category for them, will go a long way in determining what the impact of branch transformation will be (or should be) for each branch.
As heads of financial service providers manage their heavily regulated and complex businesses, they will rely on digital transformation to transition from old-school strategies to new ways of thinking. The goal is to transition from thinking of how they engage with the customer to thinking about how the customer wants to engage with them—rapidly taking ideas from the sandbox and deploying them into fully functioning products and services that keep the examiners, regulators, business units, and customers happy and engaged. Transforming the branch is a critical part of that corporate strategy, but it can be a tricky proposition.
Interested in hearing more about how you can make your retail branches the face of your bank’s digital transformation? Register today for a complimentary webinar at 11 a.m. ET on April 19, 2016, with me and with Verint’s Jenni Palocsik: “The New Face of Digital Transformation—The Bank Branch.”
Attendees will receive a copy of the report, “IDC PlanScape: How to Make the Retail Bank Branch the Face of Digital Transformation,” February 2016.